4. For a cash generating unit the following carrying amounts are stated in the balance sheet:...
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4. For a cash generating unit the following carrying amounts are stated in the balance sheet: Cm 50 60 Goodwill Development costs Patents 160 Machine 80 Land 550 The company could sell the CGU for a price of € 800 m, the arising selling costs are to estimate at € 2 million in the current year. If one retains the CGU the management expects to generate in the next three years a net cash flow of € 250 million per year, the market interest is so low that a "0"-level can be supposed. Value in use cannot be ascertained for any of the assets, but fair value less costs to sell is € 545 million for the land. Describe the necessary evaluation process of the CGU including a calculation and the final correct values of the CGU-assets. (10 p.) 4. For a cash generating unit the following carrying amounts are stated in the balance sheet: Cm 50 60 Goodwill Development costs Patents 160 Machine 80 Land 550 The company could sell the CGU for a price of € 800 m, the arising selling costs are to estimate at € 2 million in the current year. If one retains the CGU the management expects to generate in the next three years a net cash flow of € 250 million per year, the market interest is so low that a "0"-level can be supposed. Value in use cannot be ascertained for any of the assets, but fair value less costs to sell is € 545 million for the land. Describe the necessary evaluation process of the CGU including a calculation and the final correct values of the CGU-assets. (10 p.)
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Related Book For
Applying International Financial Reporting Standards
ISBN: 978-0730302124
3rd edition
Authors: Keith Alfredson, Ken Leo, Ruth Picker, Paul Pacter, Jennie Radford Victoria Wise
Posted Date:
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